It seems like the only constant about business expenses is the assurance that it will go up next year! It’s true that an expanding business will have growing expenses too, but unless that growth is supported by a proportional growth in profits as well,
Now, cutting down on business expenses is not an easy job for any company, as there are numerous parameters to be considered, alongside the consequences of each step in that direction. To make matters somewhat simpler, here are a few easy but effective ways cut down on your business expenses practically.
Barter for better deals
It may not sound like the best advice, but you would be amazed at how much bartering still is an essential tool of business in both large- and small-scale deals. If you cannot see yourself making enough profits from a previously made deal, try to negotiate a better one. Bartering doesn’t always have to be directly associated with increasing or reducing the prices, but it can be done in other ways as well.
For example, if your supplier cannot give you a direct discount on the next shipment, maybe they can give you some essential bonus items in place of that discount? If all else fails, it’s time to look for a better deal elsewhere because
Manage your employee expenses better
This one is a tricky subject as it may involve laying off some of the staff, but it doesn’t necessarily have to be that way. A good staff management software can help you cut down on your labor costs, increase efficiency in the workforce and save time, which is the most important commodity of them all.
Check out the time tracking software on Nowsta.com and you will realize how a well-designed time and attendance software can reduce staffing costs significantly by helping you to cut out a bulk of the overtime expenses. This is not to say that a
The idea is to increase the efficiency of the
Give freshers a chance
Experience cannot be replaced in some parts of the business, but youthful enthusiasm of a fresher can also do wonders for a company. Give freshers a chance and you can stand to benefit for the following reasons:
- Freshers will not charge nearly as much as someone with decades of experience
- They are more likely to work harder in trying to prove themselves and establish credibility
- A fresh, new perspective towards an old problem has often been revolutionary for businesses
Consider used equipment
Used equipment doesn’t always mean useless or damaged like a lot of people tend to think. New companies go out of business all the time and when they do, they sell off the tools of the trade at a fraction of the original price to make up for some of their losses.
Take advantage of that and buy the more expensive tools, machines and other equipment required for your business from a second-hand dealer, or maybe even directly from the seller.
Depending on your trade, you could get awesome deals on construction equipment, transportation vehicles, computers, office supplies and pretty much everything else in good condition. Conversely, if you do decide to downsize, selling off some of the used equipment might be a good idea too.
The rent Vs. buy dilemma
There are some essential tools of the trade that you will need to buy, and they will vary greatly depending on the business itself. However, the rule of thumb puts things in a simple perspective; if the equipment is expensive and your business is small, renting is a better idea than buying.
Besides, when you are trying to cut costs, renting is the more economic choice as that will allow you to factor in the rental expenses while planning each project separately and estimating profits. Buying might be more profitable in the long run, but unless your business is large enough to justify the initial investment, go with rentals.
Reevaluate your marketing expenses
Marketing is a constant process which is essential for the success of both small- and large-scale businesses, but re-evaluating your marketing expenses might provide you with insights on how to better direct a smaller budget towards advertising success. Thanks to social media and content marketing, devising an effective, low-budget marketing campaign is quite possible these days.
In business, you need to spend money to make money, and breaking even doesn’t happen overnight for even the largest of companies. Nonetheless, knowing when and where to curb your business expenses is a vital component of any financial management strategy.